To promote innovation in payment services, demanded by the accelerated digital transformation underway in the global economy, the discussion about the issuance of digital currencies by central banks (Central Bank Digital Currencies - CBDCs) has gained prominence over the last few years.
The Banco Central do Brasil (BCB) - complementing efforts of the Agenda BC# - has been promoting discussions, internal and with its international peers, aiming at the possible development of a CBDC that may:
keep up with the dynamic technological evolution of the Brazilian economy;
enhance the efficiency of the retail payment system;
foster new business models and other innovations based on technological advances;
favor Brazil's participation in regional and global economic scenarios, increasing efficiency in cross-border transactions.
It is worth noting that any developments stemming from this environment of innovation will be consistent with the BCB's mission of ensuring the stability of the currency purchasing power, fostering a sound, efficient and competitive financial system, and promoting the economic well-being of society.
The BCB, in its preliminary assessment and considered discussions within the working group on CBDC created at the bank in August 2020, highlights the following guidelines for the potential development of a Brazilian digital currency:
emphasis on the development of innovative business models based on technological advances, such as smart contracts, internet of things (IoT), and programmable money;
use in retail payments;
ability to perform online operations and possibly offline operations;
issuance by the BCB, as an extension of the physical currency, with distribution to the public intermediated by custodians of the SFN (Sistema Financeiro Nacional) and SPB (Sistema de Pagamentos Brasileiro);
not be interest-bearing;
guarantee of legal certainty in its operations;
adherence to all privacy and security principles and rules determined, in particular, by the Bank Secrecy Law, and by the General Law for the Protection of Personal Data (LGPD);
technological design allowing full compliance with international recommendations and legal norms on preventing and combating money laundering, the financing of terrorism, and the spread of weapons of mass destruction, including the compliance with court orders to track illicit operations;
adoption of solutions allowing for interoperability and integration, aiming at the improvement of cross-border payments; and
adoption of standards for resilience and cybersecurity equivalent to those applicable to critical financial market infrastructures.
The BCB acknowledges the need to deepen the discussion on the subject, including opening up a dialogue with the private sector. Before deciding on a chronogram for a CBDC project, the dialogue with the society will allow a more detailed analysis not only of use cases that may benefit from the issuance of a CBDC but also of the most appropriate technologies for its implementation.
Finally, it is important to note that these guidelines reflect the current understanding of the BCB in relation to the topic, presented here in order to bring the discussion up to the national level. Given the evolution of the discussions and developments on the topic worldwide, the BCB may reevaluate its position.